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DECREE No

DECREE No. 34/1999/ND-CP OF MAY 12, 1999 STIPULATING THE ISSUANCE OF THE 1999 GOVERNMENT BONDS FOR NATIONAL CONSTRUCTION

THE GOVERNMENT

Pursuant to the Law on Organization of the Government of September 30, 1992;

Pursuant to Ordinance No. 12/1999/PL-UBTVQH10 on the Issuance of Government Bonds for National Construction of April 27, 1999;

In order to organize the issuance of Government bonds for national construction according to the National Assembly�s Resolution No. 18/1998/QH10 of November 25, 1998;

At the proposal of the Minister of Finance,

DECREES:

Chapter I

GENERAL PROVISIONS

Article 1.- The purposes of the issuance of government bonds

The issuance of national construction bonds by the Government aims to mobilize capital from the population for further investment in irrigation and the construction of rural infrastructure projects, first of all in poor communes which meet with exceptional difficulties according to the National Assembly�s Resolution No. 18/1998/QH10 of November 25, 1998.

Article 2.- Government bond buyers

1. Vietnamese citizens within and without the country.

2. Overseas Vietnamese.

3. Foreigners working and/or residing in Vietnam.

4. Administrative and non-business agencies.

5. Political, socio-political, social and socio-professional organizations.

6. State enterprises.

7. Other enterprises of all economic sectors.

8. Foreign organizations operating on the Vietnamese territory.

Subjects defined in Clauses 4, 5 and 6 of this Article shall not be allowed to use the State budget capital and fund for the purchase of government bonds.

Chapter II

SPECIFIC PROVISIONS

Article 3.- Government bond currency, term and issuance period and capital volume to be mobilized

1. Government bonds for national construction issued in 1999 shall yield proceeds collected and registered in Vietnamese currency and have a term of 5 years from the date of issuance.

2. The issuance period shall begin on May 19, 1999.

3. The total capital volume to be mobilized shall be 4,000 billion VND (four thousand billion VND).

Article 4.- Government bond denominations

1. Government bonds issued in 1999 shall be bearer bonds with pre-printed denominations.

2. The minimum denomination of a bond shall be 20,000 VND (twenty thousand VND) and the maximum denomination shall be 50,000,000 VND (fifty million VND).

3. The Ministry of Finance shall specify various government bond denominations affordable and convenient for government bond buyers.

Article 5.- Government bond tickets

1. The Ministry of Finance shall prescribe the size, designs, flower patterns and other particulars of the government bond tickets convenient for their use, preservation, storage and anti-counterfeiting.

The Minister of Finance shall give his signature on government bond tickets.

2. The Ministry of Finance shall organize the printing, preservation and transport of government bond tickets in strict compliance with provisions of law.

Article 6.- Guaranteeing the government bonds� denomination value and interest rate

On the basis of guaranteeing the government bonds� denomination value and interest rates according to provisions of Ordinance No. 12/1999/PL-UBTVQH10 of April 27, 1999, on the Issuance of Government Bonds for National Construction the interest rate inscribed on the government bonds issued on 1999 shall be 10%/year (including inflation rate and an interest rate of 1.5%/year) and the gross interest rate for 5 years shall be 50%.

In cases where the actual five-year inflation rate plus the five-year interest rate (7.5%) is higher than 50%, the government bond owners shall enjoy the interest rate difference made up for by the State.

In cases where the actual five-year inflation rate plus the five-year interest rate (7.5%) is lower than or equal to 50%, the government bond owners shall still enjoy the interest rate of 50% as inscribed on the already issued government bonds.

Article 7.- The government bond repayment maturity

The money amount paid to buy the 1999 government bonds shall be repaid upon their maturity after 5 years (full 60 months), both the principal and interest shall be repaid in lump-sums.

In cases where the owners of mature government bonds have not yet been repaid, such government bonds� principals and interests shall be reserved on separate accounts pending the repayment. The post-maturity period shall not enjoy interest.

Article 8.- Pre-mature repayment

1. In special cases where the government bond owners wish to get pre-mature repayment of such bonds, they shall be entitled to get the bond principals fully and promptly repaid and enjoy the interests calculated on the money amounts inscribed on the bonds as follows:

a) If the bonds have been bought for less than 12 months, they shall not enjoy interest.

b) If the bonds have been bought for 12 to under 24 months, they shall enjoy an interest rate of 10%.

c) If the bonds have been bought for 24 to under 36 months, they shall enjoy an interest rate of 20%.

d) If the bonds have been bought for 36 to under 48 months, they shall enjoy an interest rate of 30%.

e) If the bonds have been bought for 48 to under 60 months, they shall enjoy an interest rate of 40%.

2. The Ministry of Finance shall concretely guide the special cases of pre-mature repayment of government bonds.

Article 9.- The rights of the government bond owners

1. The government bond owners shall be entitled to sell, donate, bequeath or pledge their government bonds.

2. The government bond owners must not use government bonds as substitutes for money in circulation and directly use them in other payment transactions.

Article 10.- Preservation and storing of government bond tickets

1. The government bond owners shall have to maintain and preserve government bond tickets. The government bond tickets which have been erased, modified or patched shall not be repaid.

2. The government bond owners who have lost such bond tickets shall not get the repayment.

3. The government bond owners may deposit their government bond tickets at the State Treasury for preservation and safe-keeping, and shall have to pay a fee set by the Ministry of Finance, which shall not be higher than the fee level for safe-keeping at the State Bank.

Article 11.- Management of government bonds bought by organizations

1. Government bonds bought by organizations shall be managed like other assets of such units.

2. In cases where an organization that has bought government bonds is dissolved, bankrupt, merged, amalgamated, divided or split up or its operation is terminated, such government bonds shall be handled according to provisions of law.

Article 12.- Places for government bond issuance and repayment

1. Places for government bond issuance and repayment shall be organized in a safe manner and convenient for bond buyers and bond repayment.

2. Government bonds shall be issued and repaid at the State Treasury�s units or at other agencies and organizations authorized by the Ministry of Finance.

3. Organizations and individuals may buy government bonds and get government bonds repaid at any places specified in Clause 2 of this Article.

Article 13.- Expenses for government bond issuance and repayment

Expenses for government bond issuance and repayment shall be allocated from the State budget, and managed and used according to the current financial management regime.

Article 14.- Mobilized capital source and source of capital for government bond repayment

1. The source of capital mobilized from the issuance of government bonds for national construction shall be fully reflected into the State budget and used for the right purposes as specified in Article 1 of this Decree; and at the same time, be publicized according to provisions of law.

2. The source of capital for repayment of government bonds� principals and interests shall be ensured by the State budget.

Article 15.- Commendation, rewards and handling of violations

1. Organizations and individuals that have made meritorious achievements in the purchase of government bonds for national construction, in the mobilization of the people to buy government bonds or in the organization of issuance of government bonds shall be commended and/or rewarded by the State according to the provisions of law.

2. Organizations and individuals that commit acts of violating the legislation on government bonds shall be handled according to provisions of Articles 14 and 15 of Ordinance No.12/1999/PL-UBTVQH10 of April 27, 1999 on the Issuance of Government Bonds for National Construction.

Chapter III

IMPLEMENTATION PROVISIONS

Article 16.- Responsibilities of the ministries, branches and concerned agencies

1. The Ministry of Finance shall base itself on the situation of the population�s income and the financial capability of State enterprises and other agencies as well as organizations to assign plans for mobilizing the purchase of government bonds to the provinces, centrally-run cities and organizations.

2. The Ministry of Culture and Information shall coordinate with the Ministry of Finance, the concerned branches and the provinces and centrally-run cities in propagating for the purposes and significance of the issuance of government bonds among the people of all strata, so that they can be fully aware thereof and actively participate therein.

3. The Ministry of Planning and Investment shall assume the prime responsibility and coordinate with the concerned ministries and branches in revising and drawing up plans for use of the source of capital mobilized from the issuance of government bonds for national construction for the right purposes, then submit them to the competent agency(ies) for decision.

4. The General Department of Statistics shall have to calculate and publicly announce the inflation rate at the Ministry of Finance�s request in service of repayment of government bonds.

5. The ministries, the ministerial-level agencies, the agencies attached to the Government, the People�s Councils and People�s Committees of all levels shall, within their respective tasks and powers, have to coordinate with the Fatherland Front�s chapters in organizing, propagating and mobilizing the people of all strata to participate in the purchase of government bonds for national construction.

Article 17.- Implementation effect

1. This Decree takes effect after its signing.

2. The Minister of Finance shall have to guide the implementation of this Decree.

3. The ministers, the heads of the ministerial-level agencies, the heads of the agencies attached to the Government and the presidents of the People�s Committees of the provinces and centrally-run cities shall have to implement this Decree.

On behalf of the Government

Prime Minister

PHAN VAN KHAI